The ABC Co. manufactures digital clock radios and sells on average 3,000 units monthlyat $25

each to retail stores. Its closest competitor produces a similar type of radio that sells for $28.

a. If the demand for ABC's product has an elasticity coefficient of 3, how many will it sell

per month if the price is lowered to $22?

b. The competitor decreases its price to $24. If cross-price elasticity between the two radios

is 0.3, what will ABC's monthly sales be?